G.R. No. 148076. January 12, 2011.

ANTONIO M. CARANDANG, petitioner, vs. HONORABLE

ANIANO A. DESIERTO, OFFICE OF THE
OMBUDSMAN, respondent.

G.R. No. 153161. January 12, 2011.*

ANTONIO M. CARANDANG, petitioner, vs.
SANDIGANBAYAN (FIFTH DIVISION), respondent.

Government-Owned or Controlled Corporations (GOCCs);

Ombudsman; Sandiganbayan; Jurisdiction; The Ombudsman has
jurisdiction over administrative cases involving grave misconduct
committed by the officials and employees of government-owned or -
controlled corporations, and, the Sandiganbayan has jurisdiction
to try and decide criminal actions involving violations of Republic
Act 3019 committed by public officials and employees, including
presidents, directors and managers of government-owned or -
controlled corporations.—It is not disputed that the Ombudsman
has jurisdiction over administrative cases involving grave
misconduct committed by the officials and employees of
government-owned or
-controlled corporations; and that the Sandiganbayan has
jurisdiction to try and decide criminal actions involving violations
of R.A. 3019 committed by public officials and employees,
including presidents, directors and managers of government-
owned or -controlled corporations. The respective jurisdictions of
the respondents are expressly defined and delineated by the law.
Same; Sequestration; Radio Philippines Network, Inc. (RPN);
Radio Philippines Network, Inc. (RPN) is neither a government-
owned nor a controlled corporation because of the Government’s
total share in RPN’s capital stock is only 32.4%.—The law defines
what are government-owned or -controlled corporations. For one,
Section 2 of Presidential Decree No. 2029 (Defining Government
Owned or Controlled Corporations and Identifying Their Role in
National Development) states: Section 2. A government-owned or -
controlled corporation is a stock or a non-stock corporation,
whether performing

_______________

* THIRD DIVISION.

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294 SUPREME COURT REPORTS ANNOTATED

 Carandang vs. Desierto

governmental or proprietary functions, which is directly chartered

by a special law or if organized under the general corporation law
is owned or controlled by the government directly, or indirectly
through a parent corporation or subsidiary corporation, to the
extent of at least a majority of its outstanding capital stock
or of its outstanding voting capital stock. Section 2 (13) of
Executive Order No. 292 (Administrative Code of 1987) renders a
similar definition of government-owned or -controlled
corporations: Section 2. General Terms Defined.—Unless the
specific words of the text or the context as a whole or a particular
statute, shall require a different meaning: x x x (13) government-
owned or controlled corporations refer to any agency organized as
a stock or non-stock corporation vested with functions relating to
public needs whether governmental or proprietary in nature, and
owned by the government directly or indirectly through its
instrumentalities either wholly, or where applicable as in the
case of stock corporations to the extent of at least 51% of
its capital stock. It is clear, therefore, that a corporation is
considered a government-owned or -controlled corporation only
when the Government directly or indirectly owns or controls at
least a majority or 51% share of the capital stock. x x x
Consequently, RPN was neither a government-owned nor a
controlled corporation because of the Government’s total share in
RPN’s capital stock being only 32.4%.

PETITIONS for review on certiorari of the decision and

resolution of the Court of Appeals and the resolutions of
the Sandiganbayan (Fifth Division).
The facts are stated in the opinion of the Court.
Cheryl Ann L. Peña for petitioner.
Office of the Ombudsman for respondent.

BERSAMIN, J.:
Petitioner Antonio M. Carandang (Carandang)
challenges the jurisdiction over him of the Ombudsman
and of the Sandiganbayan on the ground that he was being
held to account for acts committed while he was serving as
general manager and chief operating officer of Radio
Philippines Net-

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Carandang vs. Desierto

work, Inc. (RPN), which was not a government-owned or -

controlled corporation; hence, he was not a public official or
employee.
In G.R. No. 148076, Carandang seeks the reversal of the
decision1 and resolution2 promulgated by the Court of
Appeals (CA) affirming the decision3 of the Ombudsman
dismissing him from the service for grave misconduct.
 In G.R. No. 153161, Carandang assails on certiorari the
resolutions dated October 17, 20014 and March 14, 20025 of
the Sandiganbayan (Fifth Division) that sustained the
Sandiganbayan’s jurisdiction over the criminal complaint
charging him with violation of Republic Act No. 3019 (Anti-
Graft and Corrupt Practices Act).

Antecedents

Roberto S. Benedicto (Benedicto) was a stockholder of

RPN, a private corporation duly registered with the
Securities and Exchange Commission (SEC).6 In March
1986, the Government ordered the sequestration of RPN’s
properties, assets,

_______________

1 Rollo (G.R. No. 148076), pp. 34-50; penned by Associate Justice Jose
L. Sabio, Jr. (retired), with Associate Justices Ma. Alicia Austria-Martinez
(later Presiding Justice of the CA, and a Member of the Court, but already
retired) and Hilarion L. Aquino (retired), concurring.
2 Id., pp. 52-53.
3 Id., pp. 285-297.
4 Rollo (G.R. No. 153161), pp. 30-39; penned by Associate Justice
Minita V. Chico-Nazario (later Presiding Justice of the Sandiganbayan,
and a Member of the Court, but already retired), with Associate Justice
Ma. Cristina G. Cortez-Estrada (later Presiding Justice of the
Sandiganbayan, but already retired) and Associate Justice Nicodemo T.
Ferrer (retired), concurring.
5 Id., pp. 40-43; penned by Associate Justice Chico-Nazario with
Associate Justice Cortez-Estrada and Associate Justice Francisco H.
Villaruz, Jr., concurring.
6 Rollo (G.R. No. 148076), pp. 66-86.

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Carandang vs. Desierto

and business. On November 3, 1990, the Presidential

Commission on Good Government (PCGG) entered into a
compromise agreement with Benedicto, whereby he ceded
to the Government, through the PCGG, all his shares of
stock in RPN. Consequently, upon motion of the PCGG, the
Sandiganbayan (Second Division) directed the president
and corporate secretary of RPN to transfer to the PCGG
Benedicto’s shares representing 72.4% of the total issued
and outstanding capital stock of RPN.
However, Benedicto moved for a reconsideration,
contending that his RPN shares ceded to the Government,
through the PCGG, represented only 32.4% of RPN’s
outstanding capital stock, not 72.4%. Benedicto’s motion for
reconsideration has remained unresolved to this date.7

Administrative Complaint for Grave Misconduct

 On July 28, 1998, Carandang assumed office as general
manager and chief operating officer of RPN.8
On April 19, 1999, Carandang and other RPN officials
were charged with grave misconduct before the
Ombudsman. The charge alleged that Carandang, in his
capacity as the general manager of RPN, had entered into a
contract with AF Broadcasting Incorporated despite his
being an incorporator, director, and stockholder of that
corporation; that he had thus held financial and material
interest in a contract that had required the approval of his
office; and that the transaction was prohibited under
Section 7 (a) and Section 9 of Republic Act No. 6713 (Code
of Conduct and Ethical Standards for Public Officials and
Employees), thereby rendering him administratively liable
for grave misconduct.
Carandang sought the dismissal of the administrative
charge on the ground that the Ombudsman had no jurisdic-

_______________

7 Rollo (G.R. No. 153161), pp. 68-69.

8 Id., p. 182.

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tion over him because RPN was not a government-owned or

-controlled corporation.9
On May 7, 1999, the Ombudsman suspended Carandang
from his positions in RPN.
On September 8, 1999, Carandang manifested that he
was no longer interested and had no further claim to his
positions in RPN. He was subsequently replaced by Edgar
San Luis.10
In its decision dated January 26, 2000,11 the
Ombudsman found Carandang guilty of grave misconduct
and ordered his dismissal from the service.
Carandang moved for reconsideration on two grounds:
(a) that the Ombudsman had no jurisdiction over him
because RPN was not a government-owned or -controlled
corporation; and (b) that he had no financial and material
interest in the contract that required the approval of his
office.12
The Ombudsman denied Carandang’s motion for
reconsideration on March 15, 2000.13
On appeal (CA-G.R. SP No. 58204),14 the CA affirmed
the decision of the Ombudsman on February 12, 2001,
stating:

“The threshold question to be resolved in the present case is

whether or not the Office of the Ombudsman has jurisdiction over
the herein petitioner.
It is therefore of paramount importance to consider the
definitions of the following basic terms, to wit: A public office “is
the right, authority and duty, created and conferred by law, by
which for a given period, either fixed by law or enduring at the
pleasure of the creating power, an individual is invested with
some portion of the sovereign functions of the state to be exercised
by him for the benefit

_______________

9 Rollo (G.R. No. 148076), pp. 150 and 170-190.

10 CA Rollo, pp. 397 and 629-630.
11 Supra, note 3.
12 Rollo (G.R. No. 148076), pp. 298-304.
13 Id., pp. 305-308.
14 Rollo (G.R. No. 148076), pp. 309-324.

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298 SUPREME COURT REPORTS ANNOTATED

Carandang vs. Desierto

of the public.” (San Andres, Catanduanes vs. Court of Appeals,

284 SCRA 276: Chapter I, Section 1, Mechem, A Treatise on Law
of Public Offices and Officers). The individual so invested is called
the public officer which “includes elective and appointive officials
and employees, permanent or temporary, whether in the classified
or unclassified or exemption service receiving compensation, even
nominal, from the government as defined in xxx [Sec. 2 (a) of
Republic Act No. 3019 as amended].” (Sec. 2 (b) of Republic Act
No. 3019 as amended. Unless the powers conferred are of this
nature, the individual is not a public officer.
With these time-honored definitions and the substantial
findings of the Ombudsman, We are constrained to conclude that,
indeed, the herein petitioner (Antonio M. Carandang) is a public
officer. Precisely, since he (Antonio M. Carandang) was appointed
by then President Joseph Ejercito Estrada as general manager
and chief operating officer of RPN-9 (page 127 of the Rollo). As a
presidential appointee, the petitioner derives his authority from
the Philippine Government. It is luce clarius that the function of
the herein petitioner (as a presidential appointee), relates to
public duty, i.e., to represent the interest of the Philippine
Government in RPN-9 and not purely personal matter, thus, the
matter transcends the petitioner’s personal pique or pride.
xxx
Having declared earlier that the herein petitioner is a public
officer, it follows therefore that, that jurisdiction over him is
lodged in the Office of the Ombudsman.
It is worth remembering that as protector of the people, the
Ombudsman has the power, function and duty to act promptly on
complaints filed in any form or manner against officers or
employees of the Government, or of any, subdivision, agency or
instrumentality thereof, including government-owned or
controlled corporations, and enforce their administrative, civil and
criminal liability in every case where the evidence warrants in
order to promote efficient service by the Government to the
people. (Section 13 of Republic Act No. 6770).
xxx
 Accordingly, the Office of the Ombudsman is, therefore, clothed
with the proper armor when it assumed jurisdiction over the case
filed against the herein petitioner. x x x

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xxx
It appears that RPN-9 is a private corporation established to
install, operate and manage radio broadcasting and/or television
stations in the Philippines (pages 59-79 of the Rollo). On March 2,
1986, when RPN-9 was sequestered by the Government on ground
that the same was considered as an illegally obtained property
(page 3 of the Petition for Review; page 2 of the Respondent’s
Comment; pages 10 and 302 of the Rollo), RPN-9 has shed-off its
private status. In other words, there can be no gainsaying that as
of the date of its sequestration by the Government, RPN-9, while
retaining its own corporate existence, became a government-
owned or controlled corporation within the Constitutional precept.
Be it noted that a government-owned or controlled corporation
“refers to any agency organized as a stock or non-stock
corporation, vested with functions relating to public needs
whether government or proprietary in nature, and owned by the
Government directly or through its instrumentalities either
wholly, or, where applicable as in the case of stock corporations, to
the extent of at least fifty-one (51) percent of its capital stock;
Provided, That government-owned or controlled corporations may
be further categorized by the department of Budget, the Civil
Service, and the Commission on Audit for purposes of the exercise
and discharge of their respective powers, functions and
responsibilities with respect to such corporations.” (Section 2 [13],
Executive Order No. 292).
Contrary to the claim of the petitioner, this Court is of the view
and so holds that RPN-9 perfectly falls under the foregoing
definition. For one, “the government’s interest to RPN-9 amounts
to 72.4% of RPN’s capital stock with an uncontested portion of
32.4% and a contested or litigated portion of 40%.” (page 3 of the
Petition for Review; pages 8-9 of the Respondent’s Comment). On
this score, it ought to be pointed out that while the forty percent
(40%) of the seventy two point four percent (72.4%) is still
contested and litigated, until the matter becomes formally settled,
the government, for all interests and purposes still has the right
over said portion, for the law is on its side. Hence, We can safely
say that for the moment, RPN-9 is a government owned and
controlled corporation. Another thing, RPN 9, though
predominantly tackles proprietary functions—those intended for
private advantage and benefit, still, it is irrefutable that RPN-9
also performs governmental roles in the interest of

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300 SUPREME COURT REPORTS ANNOTATED

Carandang vs. Desierto
health, safety and for the advancement of public good and
welfare, affecting the public in general.
xxx
Coming now to the last assignment of error- While it may be
considered in substance that the “latest GIS clearly shows that
petitioner was no longer a stockholder of record of AF
Broadcasting Corporation at the time of his assumption of Office
in RPN 9 x x x” (Petitioner’s Reply [to Comment]; page 317 of the
Rollo), still severing ties from AF Broadcasting Corporation does
not convince this Court fully well to reverse the finding of the
Ombudsman that Antonio Carandang “appears to be liable for
Grave Misconduct” (page 10 of the Assailed Decision; page 36 of
the Rollo). Note that, as a former stockholder of AF Broadcasting
Corporation, it is improbable that the herein petitioner was
completely oblivious of the developments therein and unaware of
the contracts it (AF Broadcasting Corporation) entered into. By
reason of his past (Antonio Carandang) association with the
officers of the AF Broadcasting Corporation, it is unbelievable
that herein petitioner could simply have ignored the contract
entered into between RPN-9 and AF Broadcasting Corporation
and not at all felt to reap the benefits thereof. Technically, it is
true that herein petitioner did not directly act on behalf of AF
Broadcasting Corporation, however, We doubt that he (herein
petitioner) had no financial and/or material interest in that
particular transaction requiring the approval of his office—a fact
that could not have eluded Our attention.
xxx
WHEREFORE, premises considered and pursuant to
applicable laws and jurisprudence on the matter, the present
Petition for Review is hereby DENIED for lack of merit. The
assailed decision (dated January 26, 2000) of the Office of the
Ombudsman in OMB-ADM-0-99-0349 is hereby AFFIRMED in
toto. No pronouncement as to costs.
SO ORDERED.”15

After the denial of his motion for reconsideration,16

Carandang commenced G.R. No. 148076.

_______________

15 Supra, note 1, pp. 43-49.

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Violation of Section 3 (g), Republic Act No. 3019

On January 17, 2000, the Ombudsman formally charged

Carandang in the Sandiganbayan with a violation of
Section 3 (g) of RA 3019 by alleging in the following
information,17 viz.:

“That sometime on September 8, 1998 or thereabouts, in

Quezon City, Philippines and within the jurisdiction of this
Honorable Court, accused ANTONIO M. CARANDANG, a high
ranking officer (HRO) being then the General Manager of Radio
Philippines Network, Inc. (RPN-9), then a government owned and
controlled corporation, did then and there willfully, unlawfully
and criminally give unwarranted benefits to On Target Media
Concept, Inc. (OTMCI) through manifest partiality and gross
inexcusable negligence and caused the government undue injury,
by pre-terminating the existing block time contract between RPN
9 and OTMCI for the telecast of “Isumbong Mo Kay Tulfo” which
assured the government an income of Sixty Four Thousand and
Nine Pesos (P 64,009.00) per telecast and substituting the same
with a more onerous co-production agreement without any prior
study as to the profitability thereof, by which agreement RPN-9
assumed the additional obligation of taking part in the
promotions, sales and proper marketing of the program, with the
end result in that in a period of five (5) months RPN-9
was able to realize an income of only Seventy One Thousand One
Hundred Eighty Five Pesos (P 71,185.00), and further, by waiving
RPN-9’s collectible from OTMCI for August 1-30, 1998 in the
amount of Three Hundred Twenty Thousand and Forty Five
Pesos (P 320,045.00).”

Carandang moved to quash the information,18 arguing

that Sandiganbayan had no jurisdiction because he was not
a public official due to RPN not being a government-owned
or -controlled corporation.

_______________

16 Supra, note 2.
17 Rollo (G.R. No. 153161), pp. 89-90.
18 Id., pp. 94-100.

302

302 SUPREME COURT REPORTS ANNOTATED

Carandang vs. Desierto

The Sandiganbayan denied Carandang’s motion to

quash on October 17, 2001.19
After the denial by the Sandiganbayan of his motion for
reconsideration,20 Carandang initiated G.R. No. 153161.21
On May 27, 2002, Carandang moved to defer his
arraignment and pre-trial, citing the pendency of G.R. No.
153161.22
On July 29, 2002, the Court directed the parties in G.R.
No. 153161 to maintain the status quo until further
orders.23
On November 20, 2006, G.R. No. 148076 was
consolidated with G.R. No. 153161.24

Issue

Carandang insists that he was not a public official

considering that RPN was not a government-owned or -
controlled corporation; and that, consequently, the
Ombudsman and the Sandiganbayan had no jurisdiction
over him. He prays that the administrative and criminal
complaints filed against him should be dismissed.
Accordingly, decisive is whether or not RPN was a
government-owned or -controlled corporation.

Ruling

We find the petitions to be meritorious.

It is not disputed that the Ombudsman has jurisdiction
over administrative cases involving grave misconduct
committed by the officials and employees of government-
owned or -controlled corporations; and that the
Sandiganbayan has jurisdiction to try and decide criminal
actions involving viola-

_______________

19 Supra, note 8.
20 Supra, note 9.
21 Supra, note 7.
22 Rollo (G.R. No. 153161), pp. 133-138.
23 Id., pp. 140-141.
24 Id., p. 219.

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Carandang vs. Desierto

tions of R.A. 3019 committed by public officials and

employees, including presidents, directors and managers of
government-owned or -controlled corporations. The
respective jurisdictions of the respondents are expressly
defined and delineated by the law.25
Similarly, the law defines what are government-owned
or -controlled corporations. For one, Section 2 of
Presidential Decree No. 2029 (Defining Government Owned
or Controlled Corporations and Identifying Their Role in
National Development) states:

“Section 2. A government-owned or controlled corporation is

a stock or a non-stock corporation, whether performing
governmental or proprietary functions, which is directly chartered
by a special law or if organized under the general corporation law
is owned or controlled by the government directly, or indirectly
through a parent corporation or subsidiary corporation, to the
extent of at least a majority of its outstanding capital stock
or of its outstanding voting capital stock.”

Section 2 (13) of Executive Order No. 292

(Administrative Code of 1987)26 renders a similar definition
of government-owned or -controlled corporations:

“Section 2. General Terms Defined.—Unless the specific

words of the text or the context as a whole or a particular statute,
shall require a different meaning:
_______________

25 Article XI, Sections 12 and 13 of the 1987 Constitution; Republic Act No.
6770, otherwise known as The Ombudsman Act of 1989; Article XI, Section 4 of the
1987 Constitution, in relation to Article XIII, Section 5 of the 1973 Constitution
(See People v. Sandiganbayan, G.R. Nos. 147706-07, February 16, 2005, 451 SCRA
413); Section 4 (a) (1) (g), Republic Act No. 8249 (approved on February 5, 1997),
entitled An Act Further Defining the Jurisdiction of the Sandiganbayan, Amending
for the Purpose Presidential Decree No. 1606, as amended, Providing Funds
Therefor, and for Other Purposes.
26 Enacted on July 25, 1987.

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304 SUPREME COURT REPORTS ANNOTATED

Carandang vs. Desierto

xxx
(13) government-owned or controlled corporations refer to
any agency organized as a stock or non-stock corporation vested
with functions relating to public needs whether governmental or
proprietary in nature, and owned by the government directly or
indirectly through its instrumentalities either wholly, or where
applicable as in the case of stock corporations to the
extent of at least 51% of its capital stock.”

It is clear, therefore, that a corporation is considered a

government-owned or -controlled corporation only when the
Government directly or indirectly owns or controls at least
a majority or 51% share of the capital stock. Applying this
statutory criterion, the Court ruled in Leyson, Jr. v. Office
of the Ombudsman:27

“But these jurisprudential rules invoked by petitioner in

support of his claim that the CIIF companies are government
owned and/or controlled corporations are incomplete without
resorting to the definition of “government owned or controlled
corporation” contained in par. (13), Sec.2, Introductory Provisions
of the Administrative Code of 1987, i.e., any agency organized as a
stock or non-stock corporation vested with functions relating to
public needs whether governmental or proprietary in nature, and
owned by the government directly or indirectly through its
instrumentalities either wholly, or where applicable as in the case
of stock corporations to the extent of at least fifty-one (51) percent
of its capital stock. The definition mentions three (3) requisites,
namely, first, any agency organized as a stock or non-stock
corporation; second, vested with functions relating to public needs
whether governmental or proprietary in nature; and, third, owned
by the Government directly or through its instrumentalities
either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51) of its capital
stock.
In the present case, all three (3) corporations comprising the
CIIF companies were organized as stock corporations. The
UCPB-CIIF owns 44.10% of the shares of LEGASPI OIL,
xxx. Obvi-
_______________

27 G.R. No. 134990, April 27, 2000, 331 SCRA 227, 235-236.

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Carandang vs. Desierto

ously, the below 51% shares of stock in LEGASPI OIL

removes this firm from the definition of a government
owned or controlled corporation. x x x The Court thus
concludes that the CIIF are, as found by public respondent,
private corporations not within the scope of its jurisdiction.”28

Consequently, RPN was neither a government-owned

nor a controlled corporation because of the Government’s
total share in RPN’s capital stock being only 32.4%.
Parenthetically, although it is true that the
Sandiganbayan (Second Division) ordered the transfer to
the PCGG of Benedicto’s shares that represented 72.4% of
the total issued and outstanding capital stock of RPN, such
quantification of Benedicto’s shareholding cannot be
controlling in view of Benedicto’s timely filing of a motion
for reconsideration whereby he clarified and insisted that
the shares ceded to the PCGG had accounted for only
32.4%, not 72.4%, of RPN’s outstanding capital stock. With
the extent of Benedicto’s holdings in RPN remaining
unresolved with finality, concluding that the Government
held the majority of RPN’s capital stock as to make RPN a
government-owned or -controlled corporation would be
bereft of any factual and legal basis.
Even the PCGG and the Office of the President (OP)
have recognized RPN’s status as being neither a
government-owned nor -controlled corporation.
In its Opinion/Clarification dated August 18, 1999, the
PCGG communicated to San Luis as the president and
general manager of RPN regarding a case involving RPN
and Carandang:29

_______________

28 Bold underscoring supplied for emphasis.

29 Rollo (G.R. No. 153161), pp. 66-72.

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306 SUPREME COURT REPORTS ANNOTATED

Carandang vs. Desierto

MR. EDGAR S. SAN LUIS

President & General Manager
Radio Philippines Network, Inc.
Broadcast City, Capitol Hills
Diliman, Quezon City
Sir:
 This refers to your letter dated August 4, 1999, seeking “PCGG’s
position on the following:
“1. Whether RPN-9 is a GOCC x x x or a private corporation outside
the scope of OGCC and COA’s control given 32% Government ownership
x x x.
xxx
It appears that under the RP-Benedicto Compromise Agreement
dated November 3, 1990 — validity of which has been sustained by the
Supreme Court in G.R. No. 96087, March 31, 1992, (Guingona, Jr. vs.
PCGG, 207 SCRA 659) — Benedicto ceded all his rights, interest and/or
participation, if he has any, in RPN-9, among others, to the government
which rights, interest and/or participation per PCGG’s understanding,
include 9,494,327.50 shares of stock, i.e., about 72.4% of the total issued
and outstanding capital stock of RPN-9.
Accordingly, the Sandiganbayan (Second Division), on motion of the
government through PCGG, ordered the president and corporate
secretary of the RPN-9 to “effect the immediate cancellation and transfer
of the 9,494,327.50 shares corresponding to Benedicto’s proprietary
interest in RPN-9 to the Republic of the Philippines c/o PCGG”
(Sandiganbayan’s Resolution of February 3, 1998 in Civil Case No. 0034,
RP vs. Roberto Benedicto, et al.) Benedicto, however, filed a motion for
reconsideration of said Resolution, contending that the number of RPN-9
shares ceded by him embraces only his personal holdings and those of his
immediate family and nominees totaling 4,161,207.5 shares but
excluding the RPN-9 shares in the name of Far East Managers and
Investors, Inc. (“FEMIE”), which is about 40%, as they are corporate
properties/assets of FEMIE and not his personal holdings. Said motion
for reconsideration is still pending resolution by the Sandiganbayan.
xxx

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Carandang vs. Desierto

We agree with your x x x view that RPN-9 is not a government

owned or controlled corporation within the contemplation of the
Administrative Code of 1987, for admittedly, RPN-9 was
organized for private needs and profits, and not for public needs
and was not specifically vested with functions relating to public
needs.
Neither could RPN-9 be considered a “government-owned or
controlled corporation” under Presidential Decree (PD) No. 2029
dated February 4, 1986, which defines said terms as follows:
“Sec. 2. Definition.—A government owned- or controlled
corporation is a stock or non-stock corporation, whether
performing governmental or proprietary functions which is
directly chartered by special law or organized under the general
corporation law is owned or controlled by the government directly,
or indirectly through a parent corporation or subsidiary
corporation, to the extent of at least a majority of its outstanding
capital stock or of its outstanding voting capital stock;
Provided, that a corporation organized under the general
corporation law under private ownership at least a majority of the
shares of stock of which were conveyed to a government
corporation in satisfaction of debts incurred with a government
 financial institution, whether by foreclosure or otherwise, or a
subsidiary corporation of a government corporation organized
exclusively to own and manage, or lease, or operate specific
physical assets acquired by a government financial institution in
satisfaction of debts incurred therewith, and which in any case by
enunciated policy of the government is required to be disposed of
to private ownership within a specified period of time, shall not be
considered a government-owned or controlled corporation before
such disposition and even if the ownership or control thereof is
subsequently transferred to another government-owned or
controlled corporation.”
A government-owned or controlled corporation is either “parent”
corporation, i.e., one “created by special law” (Sec. 3 (a), PD 2029) or a
“subsidiary” corporation, i.e., one created pursuant to law where at least
a majority of the outstanding voting capital stock of which is owned by
parent government corporation and/or other government-owned
subsidiaries. (Sec. 3 (b), PD 2029).

308

308 SUPREME COURT REPORTS ANNOTATED

Carandang vs. Desierto

RPN-9 may not likewise be considered as an “acquired asset

corporation” which is one organized under the general corporation law (1)
under private ownership at least a majority of the shares of stock of
which were conveyed to a government corporation in satisfaction of debts
incurred with a government financial institution, whether by foreclosure
or otherwise, or (2) as a subsidiary corporation of a government
corporation organized exclusively to own and manage, or lease, or
operate specific physical assets acquired by a government financial
institution in satisfaction of debts incurred therewith, and which in any
case by enunciated policy of the government is required to be disposed of
to private ownership within a specified period of time” (Sec. 3 c, PD
2029), for the following reasons:
1. as noted above, the uncontested (not litigated) RPN-9 shares of
the government is only 32.4% (not a majority) of its capital stock;
2. said 32.4% shares of stock, together with the contested/litigated
40%, were not conveyed to a government corporation or the
government “in satisfaction of debts incurred with government
financial institution, whether by foreclosure or otherwise;
3. RPN-9 was not organized as a subsidiary corporation of a
government corporation organized exclusively to own and manage,
or lease, or operate specific physical assets acquired by a
government financial institution in satisfaction of debts incurred
therewith.
It should be parenthetically noted that the 32.4% or 72.4% shares of
stocks were turned over to the government by virtue of a compromise
agreement between the government and Benedicto in Civil Case No.
0034 which is “a civil action against Defendants Roberto S. Benedicto,
Ferdinand E. Marcos, Imelda R. Marcos” and others, to recover from
them ill-gotten wealth” (Amended Complaint, Aug. 12, 1987, Civil Case
No. 0034, p. 2.) As the case between the government and Benedicto, his
family and nominees was compromised, no judicial pronouncement was
made as to the character or nature of the assets and properties turned
over by Benedicto to the government — whether they are ill-gotten
wealth or not.”30

_______________

30 Emphasis and underscoring supplied.

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Carandang vs. Desierto

The PCGG’s Opinion/Clarification was affirmed by the

OP itself on February 10, 2000: 31

February 10, 2000

Mr. Edgar S. San Luis
President and General Manager
Radio Philippines Network, Inc.
Broadcasting City, Capitol Hills, Diliman
Quezon City
Dear President San Luis,
xxx
Relative thereto, please be informed that we affirm the
PCGG’s opinion that RPNI is not a government-owned
and/or controlled corporation (GOCC). Section 2 (13),
Introductory Provisions of the Administrative Code of 1987
defines a GOCC as an agency organized as a stock or non-stock
corporation vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the
government directly or indirectly through its instrumentalities
either wholly, or where applicable as in the case of stock
corporations to the extent of at least 51% of its capital stock. As
government ownership over RPNI is only 32.4% of its
capital stock, pending the final judicial determination of
the true and legal ownership of RPNI, the corporation is
deemed private.”32

Even earlier, a similar construction impelled the

Ombudsman to dismiss a criminal complaint for violation
of R.A. 3019 filed against certain RPN officials, as the
Ombudsman’s resolution dated December 15, 1997
indicates,33 a pertinent portion of which is quoted thus:

_______________

31 Rollo (G.R. No. 148076), p. 358.

32 Emphasis supplied.
33 Rollo (G.R. No. 148076), pp. 634-638.

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310 SUPREME COURT REPORTS ANNOTATED

Carandang vs. Desierto
 “This is not to mention the fact that the other respondents, the
RPN officials, are outside the jurisdiction of this Office (Office of
the Ombudsman); they are employed by a private corporation
registered with the Securities and Exchange Commission, the
RPN, which is not a government owned or controlled
corporation x x x”34

Considering that the construction of a statute given by

administrative agencies deserves respect,35 the uniform
administrative constructions of the relevant aforequoted
laws defining what are government-owned or -controlled
corporations as applied to RPN is highly persuasive.
Lastly, the conclusion that Carandang was a public
official by virtue of his having been appointed as general
manager and chief operating officer of RPN by President
Estrada deserves no consideration. President Estrada’s
intervention was merely to recommend Carandang’s
designation as general manager and chief operating officer
of RPN to the PCGG, which then cast the vote in his favor
vis-à-vis said positions.36 Under the circumstances, it was
RPN’s Board of Directors that appointed Carandang to his
positions pursuant to RPN’s By-Laws.37
In fine, Carandang was correct in insisting that being a
private individual he was not subject to the administrative
authority of the Ombudsman and to the criminal
jurisdiction of the Sandiganbayan.38

_______________

34 Emphasis supplied.
35 Philippine Amusement and Gaming Corporation (PAGCOR) v.
Philippine Gaming Jurisdiction, Incorporated (PEJI), G.R. No. 177333,
April 24, 2009, 586 SCRA 658, 667; Alfonso v. Office of the President, G.R.
No. 150091, April 2, 2007, 520 SCRA 64, 75; Delos Santos v. Court of
Appeals, G.R. No. 147912, April 26, 2006, 488 SCRA 351, 359.
36 Rollo (G.R. No. 148076), p. 99.
37 Rollo (G.R. No. 153161), pp. 56 and 182.
38 Azarcon v. Sandiganbayan, G.R. No. 116033, February 26, 1997, 268
SCRA 747.

311

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Carandang vs. Desierto

WHEREFORE, we grant the petitions in G.R. No.

148076 and G.R. No. 153161.
We reverse and set aside the decision promulgated on
February 12, 2001 by the Court of Appeals in CA-G.R. SP
No. 58204, and dismiss the administrative charge for grave
misconduct against the petitioner.
We annul and set aside the resolutions dated October
17, 2001 and March 14, 2002, as well as the order dated
March 15, 2002, all issued by the Sandiganbayan (Fifth
Division) in Criminal Case No. 25802, and dismiss
Criminal Case No. 25802 as against the petitioner.
 SO ORDERED.

Carpio-Morales (Chairperson), Brion, Villarama, Jr.

and Sereno, JJ., concur.

Petitions granted.

Note.—The resolutions which must be furnished a party

in cases before the Office of the Ombudsman which
involves high ranking officials under R.A. 8249 refer to
those approved by the Ombudsman. (Kuizon vs. Desierto,
354 SCRA 158 [2001])
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